Point of sale transaction authorization devices, in which a purchase is registered against the account of the purchaser and electronic banking machines or automated teller machines ("ATM"s) are well known and widely used systems. Such systems will collectively be referred to hereafter as "account authorization systems". Also well known and widely used are telephone paging systems.
An account authorization system allows a user to complete commercial or financial transactions without recourse to either cash or a bank teller and generally comprises three elements; namely a database which stores financial information for each account; a code, either secret or otherwise, to permit outside access to each account record individually; and a communication network which allows access to the system and which communicates the codes and account authorization instructions between the database and a system user. The code is generally encrypted on an identification card and the communication network is generally a telephone network which is accessed using either the usual telephone or a modem equipped card-reader/display terminal such as the I.B.M. model 5990 and similar apparatus built by Philips, N.C.R. and International Verifact Inc.
In a conventional transaction authorization system, a customer wishing to conclude a cashless transaction supplies his identification card by, way of a credit card, a debit card or a bank client card, to a merchant at the point of sale. The merchant relays the customer's identification codes, using a telephone or a cardreader, to a financial institution which instructs the merchant whether to complete the transaction based on the identified customer's credit history and account information as contained in his account record in the central database.
In a conventional electronic banking system using an ATM, the user directly interacts with the financial institution's central database. The merchant is bypassed and transaction information and instructions are conveyed directly to the user.
In a transaction authorization system, once the customer has communicated his identification code to the merchant, further direct communication occurs only between the financial institution and the merchant. Further communication to the customer will only take the indirect form of the merchant completing the transaction or refusing to complete the transaction due to an unspecified detected irregularity such as overdrawn credit lines or a stolen card alert.
When a user engages in direct communication with the financial institution, as is the case with an electronic banking system or ATM, the communication is in the nature of system commands instructing the user how to complete a transaction. The communication does not include information independent of the account authorization system. A similar distinction between types of information exists between a radio frequency carrier and its audio frequency signal and between a computer operating system program and the files on which it operates. Applying the analogy to the account authorization system above, the ATM directs operating system commands to the user but the system is a carrier without a signal.
Reference is made to French Patent Number 2640782 (Daibillan). The '782 reference describes a network of card-accessible electronic notice boards. By inserting an identification card at one notice board, a subscriber can post to the network a message for a second subscriber to be received by the second subscriber upon insertion of his identification card at any notice board on the network.
However, the network described in the '782 patent is dedicated to exchanging messages between individual subscribers who are financially responsible for the construction and maintenance of the system. The limited purpose and demographic distribution of the network users would limit the network's size as compared to a financial database network created by large financial institutions to facilitate national and international financial transactions. This network size limitation will be embodied in fewer nodes, shorter distances between nodes and fewer subscribers. By analogy, the information on this network would be trapped by an inadequate carrier or operating system.
In a conventional telephone paging system, a plurality of telephones are connected through a telephone network to a central computer. To page a subscriber, a person telephones the central computer and enters a message. The central computer then broadcasts via radio waves a paging signal addressed to the specified receiving device or "pager" such as a Motorola model A05KLB5362CA. The specified pager then flashes, beeps, oscillates or otherwise notifies the subscriber of the message pending. Such a pager, however, will only function when operated within the bounds of its radio network and the pager must include electronic circuitry to operate as a receiver/signaller. Both of these requirements make it difficult to contact a pager subscriber during extended unorganized travel and, of course, this method of content is limited to individuals who may carry a pager.